House Committee on Natural Resources Chairman Rob Bishop (R-Utah) filed an amicus brief over the weekend with the U.S. Court of Appeals for the First Circuit on the legislative intent of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).

The brief, which was requested by the Court, outlines the core statutory mandates of PROMESA’s Financial Oversight and Management Board in restoring fiscal discipline to the Commonwealth's government and facilitating an orderly and equitable process for debt repayment that results in Puerto Rico’s eventual return to capital markets. The motion is intended to provide the Court with the background and history to facilitate proper interpretation of PROMESA.

“The policy judgment embodied in PROMESA is stated clearly in its first

substantive provision, Section 101(a): ‘The purpose of the Oversight Board is to

provide a method for a covered territory to achieve fiscal responsibility and access

to the capital markets.’ Congress determined that, along with providing access to

restructuring support, the Commonwealth’s financial house must be placed in order

to remedy the decades of financial mismanagement that led to the present crisis.

Congress also required the Commonwealth to deal fairly with its existing creditors

and respect their rights, to enable conditions by which Puerto Rico could reach

access to credit at reasonable rates of interest in the capital markets,” the brief states.

“The purpose espoused in Section 101 governs all of PROMESA’s provisions.

PROMESA prioritizes consensual resolutions, makes a nonconsensual restructuring

available only as a last resort, and provides that creditors’ rights must be protected

during negotiations and any restructuring process. Amicus respectfully submits that

the intent of the Committee as reflected in its design of the statute is highly relevant

and should assist the Court in its interpretation of PROMESA. This amicus brief

provides important background to PROMESA’s enactment and context to the Court

regarding specific provisions that allow the purpose of PROMESA to be fulfilled.”

A copy of the brief can be found here.